Lobbyists press House for stiffer penalties

Industry lobbyists pressed House members on Wednesday to pass legislation that would make illegal streaming of movies, TV shows and other types of content a felony, bringing the penalty in line with those for other types of criminal copyright infringement.

But cable operators have raised concerns that the current text of a bill introduced last month is too broad and could somehow even subject their executives to criminal penalties.

With streaming rapidly becoming the most common means of transmitting pirated content, the hope for studios and unions is that with stiffer penalties, law enforcement will give greater priority to cracking down on offenders. Illegal streaming is currently considered a misdemeanor, while illegally reproducing or distributing a copyrighted work is a felony.

“Streaming technology is rapidly becoming the most popular mechanism for transmitting stolen content on rogue sites,” Michael O’Leary, exec VP of governmental affairs for the MPAA, told a House subcommittee hearing on Wednesday. “Illegal sites link U.S. consumers to illegally streamed content.”

Sandra Aistars, executive director of the Copyright Alliance, described the experience of one independent filmmaker who found that fighting illegal streaming was a daunting experience, or “the equivalent of being handed an umbrella and being told to stand underneath Niagara Falls.”

Last month, Sen. Amy Klobuchar (D-Minn.), Sen. John Cornyn (R-Texas) and Sen. Chris Coons (D-Del.) introduced legislation to make illegal streaming a felony; a markup vote before the Senate Judiciary Committee is expected on June 9.

At least in civil court, however, there is currently a dispute over just what types of streaming constitute infringement and what do not. Viacom is challenging cable operators’ introduction of apps that stream a customer’s channels to an iPad. Time Warner Cable and Cablevision are among those that have launched such services.

The MPAA sued the tech startup Zediva, which transmits DVD streams into customers’ homes. Because it buys multiple copies of DVDs so they are available as each customer requests one, Zediva claims that it is little different than a video rental store, which rents out copies of movies without studio authorization. The studios, however, claim that it violates the public performance provisions of the Copyright Act.

In the House hearing, Rep. Mel Watt (D-N.C.) noted that reps from the National Cable & Telecommunications Assn., the cable industry’s trade group, were invited to testify at the hearing but declined. He said that the objections to the Senate bill arise from fears that it would “allow criminal prosecution for commercial managers” engaged in licensing disputes with content providers.

A spokesman for the NCTA said the org had no comment.

Expressing some skepticism over the proposed legislation was Rep. Zoe Lofgren (D-Calif.), who said that she wants to “make sure we have some protections here so people who in good faith believe what they are doing is legal don’t get caught up in the criminal justice system.”

“You can end up destroying technological innovation, even though I am sure that is not the motivation of any party here,” she said.

O’Leary, however, called the increased streaming penalties “the logical extension of existing law,” with safeguards in place to differentiate a civil copyright dispute from criminal infringement. “Federal prosecutors do not make decisions rashly and do not make decisions without looking at all the evidence,” he said.

The Senate bill would bring illegal streaming into parity with other types of infringement by defining it as a “public performance.” It also defines the threshold for felony illegal streaming as 10 or more public performances by electronic means, during any 180-day period, of one or more copyrighted works. The total retail value of the performances would have to exceed $2,500. And the total fair market value of licenses for those performances would have to exceed $5,000.

Maria Pallante, who was just appointed new U.S. Register of Copyrights, noted that the standards for criminal infringement are tied to “willfulness” to commit such an offense as well as a profit motive. Rep. Howard Berman (D-Calif.) said that the legislation also couldn’t be written so as to give Internet pirates a way to avoid prosecution by claiming they are legitimate.

Congress also is considering other legislation targeted at blocking the flow of money and support to overseas sites that traffic in pirated content. That bill, called the Protect IP Act, has generated opposition from some digital rights groups and tech firms.

Markham Erickson, an attorney who represents tech companies and Internet firms in Washington, said that although he has concerns on the Protect IP Act, he reviewed the streaming legislation and concluded “it didn’t look like it would pose any particular problems.

“It seems like a consistent or valid policy,” he said.

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